Indoor Billbd./Northwest, Inc. v. TheLaundryList.com ( 2023 )

No. 686 December 28, 2023 789
IN THE COURT OF APPEALS OF THE
STATE OF OREGON
INDOOR BILLBOARD / NORTHWEST, INC.,
an Oregon corporation,
Plaintiff-Respondent,
v.
THELAUNDRYLIST.COM, INC.,
a California corporation,
Defendant,
and
SUPREME LINEN SERVICES, INC.,
a Florida corporation,
Defendant-Appellant.
Multnomah County Circuit Court
20CV22976; A177281
Leslie G. Bottomly, Judge.
Argued and submitted February 22, 2023.
Allison Leonard argued the cause for appellant. Also on
the opening brief were Damian & Valori LLP; and Jeanne
Sinnott and Wildwood Law Group LLC. On the reply brief
were Allison Leonard and Wildwood Law Group LLC.
Dean Alterman argued the cause and filed the brief for
respondent.
Before Aoyagi, Presiding Judge, and Joyce, Judge, and
Jacquot, Judge.
JACQUOT, J.
Reversed and remanded.
790 Indoor Billbd. / Northwest, Inc. v. TheLaundryList.com
Cite as 329 Or App 789 (2023) 791
JACQUOT, J.
Defendant Supreme Linen Services, Inc., a Florida
corporation, appeals an order denying its motion under ORCP
71 B to set aside a default judgment against it obtained by
plaintiff Indoor Billboard/Northwest, Inc. On appeal, defen-
dant contends that the trial court erred in determining that
the facts did not demonstrate excusable neglect. We reject
that argument without further discussion. Defendant also
asserts that the court erred by failing to set aside the default
judgment as void for lack of personal jurisdiction. The trial
court concluded that it had personal jurisdiction over defen-
dant based on ORCP 4 D. We agree with defendant that the
requirements of ORCP 4 D were not satisfied.1 Before the
trial court, the parties disputed whether the court had per-
sonal jurisdiction under additional subsections of ORCP 4,
and they reiterate some of those arguments on appeal, but
we do not reach those additional issues, because the trial
court did not make any findings on the disputed issues of
fact. See Sherertz v. Brownstein Rask, 314 Or App 331, 341,
498 P3d 850 (2021), rev den, 369 Or 338 (2022) (we address an
alternative basis for affirmance if it is “properly presented
again on appeal and raises a question of law,” whereas we
remand if the trial court must make additional factual find-
ings). Accordingly, we reverse and remand for the trial court
to find the facts and evaluate the parties’ contentions about
other subsections of ORCP 4.
A default judgment that is void for lack of personal
jurisdiction must be set aside. Nelson v. American Home
Mortgage Servicing, Inc., 249 Or App 555, 558, 278 P3d 89
(2012). To determine whether an Oregon court can exercise
personal jurisdiction over a defendant, both the trial and
the appellate courts look to the pleadings and the affidavits
of both parties. Munson v. Valley Energy Investment Fund,
264 Or App 679, 700, 333 P3d 1102 (2014). Initially, the
“[p]laintiff bears the burden of alleging and proving the facts
necessary to establish jurisdiction.” Wallace v. Holden, 297
Or App 824, 826, 445 P3d 914, rev den, 365 Or 557 (2019).
1
Defendant further contends that the court’s ruling failed to comply with
due process; however, in light of our conclusion that the allegations and evidence
do not establish that either ORCP 4 D(1) or (2) was satisfied, we need not reach
defendant’s due process arguments.
792 Indoor Billbd. / Northwest, Inc. v. TheLaundryList.com
That remains true when a defendant moves to set aside a
default judgment as void for lack of personal jurisdiction.
Horn and Horn, 97 Or App 177, 180, 775 P2d 338, rev den,
308 Or 465 (1989).
“We review the trial court’s factual findings to
determine whether they are supported by any competent
evidence, and, where the trial court failed to make express
factual findings, we assume that the court found the rele-
vant facts in a manner consistent with its ultimate ruling.”
Munson, 264 Or App at 700-01 (internal quotation marks
omitted). Our assumption that the court made implicit find-
ings of fact has two exceptions. First, it does not apply when
an implicit factual finding is not necessary to the court’s
ultimate conclusion. Pereida-Alba v. Coursey, 356 Or 654,
671, 342 P3d 70 (2015); see also State v. Lunacolorado, 238
Or App 691, 696, 243 P3d 125 (2010), rev den, 350 Or 530(2011) (appellate court may infer a finding of fact “only
where we can deduce that the trial court’s chain of reason-
ing must necessarily have included that fact as one of its
links”). Second, we defer to a court’s implicit factual findings
only to the extent that they are supported by the evidence in
the record. Pereida-Alba, 356 Or at 671.
In this case, the trial court made few express find-
ings of fact; thus, for the most part, our task is to ascertain
what implicit findings were necessary to its analysis and
defer to them to the extent that they are supported by evi-
dence. We begin by summarizing the basic facts consistently
with the trial court’s few explicit findings. We provide addi-
tional facts about defendant’s relationship with codefendant
TheLaundryList.Com, Inc. (Laundry List) further below.
The dispute underlying this litigation arose from
plaintiff’s purchase of an industrial washing machine that
previously belonged to defendant. Laundry List, a seller
and broker of industrial laundry equipment, sent plaintiff
an email advertising several industrial washing machines
for sale. Plaintiff expressed interest in one of the washers,
and, in response, Laundry List sent plaintiff a photograph
of a meter reading on an industrial washer. At the time,
the washer was located at defendant’s facility in Florida,
and plaintiff sent an agent there. Defendant’s agent showed
Cite as 329 Or App 789 (2023) 793
plaintiff’s agent a washer with the same meter reading as
the one in the photograph Laundry List had sent.2 That is
the only direct interaction that took place between defen-
dant and plaintiff.
Laundry List sent plaintiff an invoice for a washer,
and plaintiff paid Laundry List for the washer and for ship-
ping to Oregon. Laundry List arranged for shipping and sent
a truck to defendant’s warehouse in Florida, where defendant
loaded several pieces of equipment, including the washer
that was later delivered to plaintiff, onto the truck. About a
week later, the same truck delivered a washer to plaintiff in
Oregon. The washer plaintiff received was different from the
one whose meter reading plaintiff had seen in the photograph
and that its agent had seen at defendant’s facility in Florida.
Plaintiff soon filed this action against defendant
and Laundry List for recission of contract and fraud. In
the complaint, plaintiff alleged that both defendant and
Laundry List sold the washer to plaintiff. Defendant did not
respond, and plaintiff obtained a default judgment against
it.3 Five months later, defendant filed the motion at issue
here, in which it contended that, pursuant to ORCP 71 B,
the court must set aside the default judgment on the ground
that it is void for lack of personal jurisdiction.
One of the bases on which plaintiff asserted there
was personal jurisdiction was ORCP 4 D, which allows for
jurisdiction over a properly served defendant “[i]n any action
claiming injury to person or property within this state aris-
ing out of an act or omission outside this state by the defen-
dant,” so long as, at the time the alleged injury occurred, the
defendant either carried on “[s]olicitation or service activities
* * * within this state,” ORCP 4 D(1), or “[p]roducts, mate-
rials, or things distributed, processed, serviced, or manu-
factured by the defendant were used or consumed within
this state in the ordinary course of trade,” ORCP 4 D(2).
The trial court determined that it had personal jurisdiction
2
The pleadings and record do not reveal anything more about the interaction
between defendant and plaintiff’s agent. For example, it is unknown how plain-
tiff’s agent identified himself to defendant’s agent.
3
Laundry List did eventually respond. Laundry List and plaintiff have
resolved their dispute. Laundry List is not a party to this appeal.
794 Indoor Billbd. / Northwest, Inc. v. TheLaundryList.com
under ORCP 4 D, finding that plaintiff had been injured—
by receiving a different washer than the one for which it
had contracted—in Oregon, by an act—defendant’s act of
showing a washer to plaintiff’s agent—that took place in
Florida. However, the court did not specify, and we cannot
tell, whether, in reaching the conclusion that it had personal
jurisdiction under ORCP 4 D, it found the additional conduct
required by ORCP 4 D(1) or the additional conduct required
by ORCP 4 D(2).
At the outset, we note that, as demonstrated by
the facts set out above, plaintiff has not alleged or proved
facts demonstrating that defendant itself carried out solici-
tation or service activities in Oregon, as required by ORCP
4 D(1), or that “[p]roducts, materials, or things distributed,
processed, serviced, or manufactured” by defendant itself
“were used or consumed” in Oregon “in the ordinary course
of trade,” as required by ORCP 4 D(2).4 As defendant’s own
conduct did not qualify under either subsection, for the court
to exercise jurisdiction over defendant under either prong of
ORCP 4 D, the court necessarily, though implicitly, found
that Laundry List was acting on defendant’s behalf in the
course of the transaction at issue. However, as explained
below, the evidence in the record does not support a finding
that Laundry List was acting for defendant, i.e., that it was
defendant’s agent.
In its complaint, plaintiff alleged that both defen-
dant and Laundry List sold the washer. Plaintiff did not
allege any relationship between Laundry List and defen-
dant or allege that Laundry List was acting on defendant’s
behalf. The complaint described Laundry List as being “in
the business of brokering the sale of used industrial laundry
equipment * * * and is by its own description ‘the #1 seller of
used industrial laundry machinery in the North America.’ ”
Laundry List admitted to that description in its answer.
4
As recounted above, the pleadings and evidence indicate that defendant
took only two direct actions in the transaction. First, defendant showed plain-
tiff’s agent a washer; that conduct took place in Florida, not Oregon. Second,
defendant loaded equipment onto a truck provided by Laundry List; to the extent
that that conduct could be considered “distribution” of the equipment (a question
that we need not, and do not, consider), it was not alleged or shown to be part of
defendant’s ordinary course of trade.
Cite as 329 Or App 789 (2023) 795
Neither plaintiff nor Laundry List provided any
documentation indicating that defendant had requested or
allowed Laundry List to act on defendant’s behalf. In its
arguments below regarding jurisdiction, plaintiff did not
contend that Laundry List acted as a broker in this spe-
cific transaction, but rather stated that “Laundry List tra-
ditionally acts as a broker for parties such as [defendant].”
(Emphasis added.) That assertion was not backed by evi-
dence of any agreement between Laundry List and defen-
dant, and no party submitted evidence that Laundry List
serves only as a broker. Plaintiff’s president stated in a
declaration that plaintiff was “unaware of any agreement,
if one exists, between TheLaundryList.Com and Supreme
Linen for TheLaundryList.Com’s services as a broker.”
Defendant’s president averred in a declaration that
at no time did defendant engage Laundry List as a broker
and no agreement to such a relationship existed. He further
asserted that defendant never consented to Laundry List
advertising the washer for sale prior to Laundry List’s pur-
chase of the washer from defendant. Defendant submitted
two invoices between itself and Laundry List, from around
the same time as Laundry List’s invoice to plaintiff, show-
ing that defendant transferred four machines to Laundry
List. Neither invoice contained any brokerage or consign-
ment terms, neither invoice made any reference whatsoever
to plaintiff as a party to either transaction, and there is no
evidence of defendant sending any invoices to anyone other
than Laundry List or collecting any money from plaintiff.5
No other documentation in the record indicates that
Laundry List was acting on behalf of defendant, or anyone
else, in either this transaction or any other transaction.
Despite plaintiff’s assertion that Laundry List “tradition-
ally” acts as a broker, none of the parties, including Laundry
List, ever indicated that Laundry List acted only as a broker
5
We note that each of the two invoices includes a machine with the same
serial number—that is, either one washer was transferred from Supreme Linen
to Laundry List twice, or the serial number for one of the transferred machines
was never included on an invoice. The serial number listed on the invoice between
plaintiff and Laundry List does not appear on the invoices between Supreme
Linen and Laundry List. However, neither of the parties addressed the signifi-
cance of those facts at any point in the litigation below or on appeal. The record
also does not reflect the serial number of the washer that plaintiff received.
796 Indoor Billbd. / Northwest, Inc. v. TheLaundryList.com
or agent for sellers—that is, that it did not buy and resell
laundry equipment on its own behalf—and none of the par-
ties submitted evidence that Laundry List was acting as a
broker in this specific transaction.
In sum, the evidence in the record as to Laundry
List’s participation in the transaction, viewed in the light
most favorable to plaintiff, is consistent with two possibili-
ties: first, Laundry List was acting as a broker for defendant
when it solicited the sale, sold the washer to plaintiff, and
arranged for the washer’s delivery in Oregon; or, second,
Laundry List was acting on its own behalf by buying the
washer from defendant, soliciting the sale to plaintiff, actu-
ally selling the washer to plaintiff, and arranging for the
washer’s delivery in Oregon.
There is nothing allowing a nonspeculative infer-
ence that Laundry List was actually acting on behalf of
defendant. There was no direct evidence of that, like an
agreement between defendant and Laundry List; defendant
denied that there was such an agreement, and plaintiff
declared that it did not know of one. Plaintiff’s assertion
that Laundry List “traditionally” acts as a broker does not
answer the question whether, in this case, Laundry List was
acting as a broker. Moreover, the facts about the transaction
itself do not support that inference, because nothing about
them makes it more likely that Laundry List was acting on
behalf of defendant than that Laundry List was acting on its
own behalf. Thus, the court’s implicit finding that Laundry
List was acting on behalf of defendant was not supported
by the evidence. See State v. Bivins, 191 Or App 460, 468,
83 P3d 379 (2004) (noting that evidence is “insufficient to
support an inference when the conclusion to be drawn from
it requires too great an inferential leap—that is, when the
logic is too strained” (internal quotation marks omitted)).
Thus, the court erred in denying the motion to
set aside the judgment on the ground that it had personal
jurisdiction under ORCP 4 D. Accordingly, we reverse and
remand. On remand, the trial court can address the parties’
contentions as to whether the court has personal jurisdic-
tion over defendant based on other subsections of ORCP 4.
Reversed and remanded.